VAT cannot be reclaimed on which of the following?

VAT cannot be reclaimed on expenses related to entertaining customers. This is due to the specific regulations that govern VAT and its reclaimability in relation to business entertainment. When a business incurs costs to entertain customers or potential clients, these expenses usually have strict limitations placed upon them in terms of VAT recovery. Generally, VAT incurred on entertaining facilities provided directly to clients is not recoverable, as the government aims to curb lavish spending on entertainment, which may not facilitate business or economic activity.

In contrast, VAT on international business travel, equipment purchases, and employee training can often be reclaimed under certain conditions. International business travel typically qualifies for VAT reclamation because it directly supports the business operations. Equipment purchases can also commonly allow for VAT recovery since such assets are used for business purposes. Similarly, employee training is often seen as an investment into the workforce and may also be eligible for VAT reclaim.

This understanding reflects the regulations surrounding VAT and gives businesses a clear framework on what expenses are reclaimable and which are not, helping them manage their VAT returns effectively.